The Immorality of Student Loan Forgiveness and Free College

If you or your parents can afford to pay your way, you should.

So now college should be free in the same way K–12 education is. That's what most (though not all) of the Democratic presidential candidates are saying, with Massachusetts Sen. Elizabeth Warren offering the most-detailed plan to make tuition at public universities free, forgiving "95 percent" of existing student debt, and increasing the amount of money for Pell grants and historically black colleges and universities. Ironically, the push for "free" college is coming at a time when a historically high percentage—about 70 percent—of recent high-school graduates are already enrolling in college. College has somehow become so unaffordable and remote that more and more people are attending.

"This is the kind of big, structural change we need to make sure our kids have opportunity in this country," says Warren in a video she posted at Twitter. But just like Bernie Sanders's routine and misleading invocation of "people with $300,000 in student debt," Warren's plan doesn't just misrepresent the impact of student loans on the individual level and the historically high availability of access to higher education; it's one more step toward an America where the people who benefit from something get somebody else to pay for it. Above and beyond any financial considerations, that's a bad attitude to inculcate.

Warren would pay for her plan with an "Ultra-Millionaire Tax" on the 75,000 richest households in America, which she says would raise $2.75 trillion over a decade. As Peter Suderman has noted, "European countries that have imposed wealth taxes have largely given up on them; of the dozen OECD nations that had wealth taxes in 1990, just four still have the tax on the books." Warren also keeps promising to spend her new revenue on all sorts of things, to a degree that there isn't enough money to cover her growing list of giveaways.

Warren's plan is of a piece with progressive Democrats pushing for more and more goods and services to be provided by the government regardless of citizens' ability to cover their own costs. From a financial perspective, this sort of reflex is flatly unsustainable in a country that has already run up a $22 trillion tab and whose rising debt service will cost more than Medicaid next year and more than military spending in 2023. But there's also a moral argument to be made here: Why shouldn't we expect people who can pay for their own education, health care, and retirement to do so? And why shouldn't we expect people who benefit from something to fund all or most of their activity?

I'm calling for universal free college and the cancellation of student loan debt for more than 95% of Americans. This is the kind of big, structural change we need to make sure our kids have opportunity in this country. pic.twitter.com/KERw3APDMo

When it comes to college, high-school grads are enrolling at historically high rates, a sign that they have access to higher education. Using three-year moving averages (which smooth out minor fluctuations) the National Center for Education Statistics (NCES) reports that a record-high level 69.5 percent of "recent high-school completers" are enrolled in college. In 1975, the first year for which data is presented, the figure was 49.1 percent. In 1980, it was 50.8 percent. Warren can rhapsodize about how much cheaper college tuition used to be, but the reality is that far higher percentages of people are attending college than ever before. In fact, according to NCES, a record high level of students from low-income households are attending college right out of a high school. The three-year moving average for low-income students in 2016, the latest year for which data is presented, was an unprecedented 67.1 percent—more than double the figure in 1980.

And despite claims that "we're crushing an entire generation with student-loan debt," the typical undergrad borrower is doing fine. About 70 percent of the Class of 2018 graduated with some debt, and their median monthly payment is $222. The overall amount of student debt is gigantic—about $1.5 trillion—but when you break it down to what the typical borrower is actually on the hook for, the picture changes dramatically.

If college students have skin in their own game, they'll think more seriously about going to college in the first place and be more motivated to be serious and to finish. Also, one reason why tuition hikes have outpaced the general rate of inflation is that government-guaranteed student loans have helped to goose the costs. Meanwhile, the returns to a college degree remain immense even if they have flattened a bit in recent years. In a 2016 paper for the Federal Reserve Bank of San Francisco, Robert G. Valletta found that in 1980, the average worker with a high school degree made $16.33 per hour while the average worker with a college degree made $22.85. In 2015, the high school grad made $17.98 per hour while the college grad averaged $30.93. (All those figures are in 2015 dollars.) While studies of the effect of college on take-home pay vary, all show large gains and lower unemployment rates. If you're going to make as much as a million extra dollars over your working lifetime by getting a B.A., you should be the one footing the bill.

There's nothing wrong with asking people who benefit from something to shoulder all or part of the costs. Our national finances are falling apart largely because we keep insisting that all benefits be universal and that nobody pay their own way when it comes to big-ticket items such as health care, education, and retirement. One result in those areas are markets that don't function as efficiently as they would otherwise. Another is a pervasive belief that we can always pass the costs of our choices onto other people. Our government is trying to be all things to all people It would be better to let it focus on helping people who can't help themselves, and let the rest of us get on our with our own lives.

CORRECTION: This article originally referred to the NCES as the National Center for Education Services; it is the National Center for Education Statistics.

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Her party is heading in a dangerous direction. Both parties have been trying to get themselves elected on giveaways, be they the promise of employment opportunities or the promise of entitlements, and this is simply the next step in courting the less-than-economically-savvy voter with unattainable payouts.

Her party? Both parties are headed in the same direction. And both parties have spraypainted the windshield, sawed off the steering wheel, tied a brick to the accelerator, and cut the brake line. Now the only thing they are each doing is yelling out the window about how they are gonna double-down on the bets cuz the other side is chicken.

And there pretty obviously is no such thing as a ‘economically savvy voter’ who will resist or even question any of that. Voters are about as close as you can get to 100% support of both turd and douche. The only hope is non-voters – and its a safe bet that they are not savvy either and can’t be mobilized in a democracy even if they were.

That’s what he said.Her party is heading in a dangerous direction. Both parties have been trying to get themselves elected on giveaways, be they the promise of employment opportunities or the promise of entitlements

Put the colleges and universities at least partly on the hook for student loans discharged in bankruptcy. When universities have to give back a large amount of the money they collected for issuing Studies degrees, the free market will take care of a lot of that crap.

Under the Obama administration, the Department of Education was working on more accountability. One of the things they did was withhold federal loans from universities that had abysmal job rates for their graduates.

From the link: “Department of Education Secretary Betsy DeVos is rolling back another Obama-era regulation that was meant to protect students from abusive practices by for-profit schools and colleges.”

EE made an ass of himself again, and we can all enjoy it. Hint: “meant to protect” has nothing to do with actual function.

The regulation required for-profit colleges and certificate programs at non-profit colleges to publish information on how much student debt graduates took on and how much they were earning after leaving school. If the average debt-to-income ratio did not meet government standards, the school’s federal funding would be revoked.

And you seemed to get no further: “DeVos froze the two rules more than a year ago so that they could be reviewed and to make sure they would actually help harmed students, she said at the time. […] On Friday, DeVos proposed a new rule that would require all schools — both for- and non-profit — to provide data on student outcomes.”

Without student loans to pay back, students won’t enroll in courses that will pay returns when they graduate. Instead they will spend four or more years in various grievance studies instead of math, science or engineering. Because the money isn’t theirs, they will be less responsible with it and more educational efforts will be spent on worthless endeavors.

Also, I bet a large percentage of students going into college have a horrible grasp of the basic stuff they should’ve learned in high school, so they have to take remedial courses in college to catch up & actually take college level courses in those basic math & sciences, etc..So, they opt for a degree in Gender/Sexual BS & Social Justice BS!!!

Indeed, it seems that there should be some level of qualification beyond “they let me in” to get a government guaranteed student loan for a non-vocational course of study. This might include having SAT scores that show the applicant has a mastery of what they should have learned in high school. Those that can’t meet those qualification levels could go to local community colleges to acquire the remedial skills they missed in high school.

As well, for graduate studies, government guaranteed student loans should only be given for fields of study where the likelihood of getting a paying job that requires that degree (or similar specialized degree) is high. That would rule out loans to pursue a graduate degree in Interpretive Lesbian Dance or Gender Studies and the like. If a student is so exceptional that they are likely to be the top candidate for one of the two jobs that opens up each year and requires those degrees, a university somewhere will give them a scholarship.

This giveaway is not to the students with terrible debts but to the professoriate like Warren who have pocketed the cash along the way and want the gravy train to keep running.

I’m happy my son got a couple of solid science degrees from Harvard, living down the block from Warren on Linnaean Street, but none of his profs claimed an ancestry they did not have in order to be hired.

I added up the Forbes 400 on 30 Jan 2019. It came to $2.891T. Not even three trillion dollars, not even one year of the Federal budget, or three years’ deficit, even if you could confiscate all of it.

And if you did confiscate all of it, it’s not Scrooge McDuck swimming pools full of gold and jewelry, or even cash, or sitting in bank accounts. It’s assets: things, property, not-cash. Investments mostly: stocks and bonds; some mansions, yachts, biz jets, Ferraris, and other toys. But all of it has to be sold to become the cash you can use to pay down the national debt or even eliminate the budget debt for a measly three years. $3T is peanuts and won’t even put a dent in all the single-payer schemes.

You couldn’t convert it to cash anyway. You’d have to sell it, and the only people who could buy it, couldn’t, because all their wealth has been confiscated.

You couldn’t nibble at it either with Lizzie Warren’s 2% or 5% wealth tax, or Bernie Sanders’ 77% inheritance tax. Not only does the basic problem remain, that it is not cash but assets which have to be sold, but the value isn’t even known until you sell it, so you’d just be guessing what your stolen 2% or 5% or 77% is. With so many more sellers than buyers, the values would be depressed and you’d get pennies on the dollar, if you managed to sell much at all; everyone with the wealth to afford buying it would be scrambling to sell their own assets to pay their own wealth tax.

I don’t know enough about corporate financing to know the knock-on effects of this deflation in corporate stock prices. I know they trade stick in mergers and acquisitions. I guess that they sell new stock for expansion plans. I suppose the primary alternative is bank loans. But if all stock prices are equally depressed by the sudden sell off, would that actually affect expansion plans, or mergers and acquisitions? There’d be massive confusion for a while as everyone tried to guess what was going to happen next. Established businesses value stability and predictability because that’s the only way to make useful plans. New models, new products, all require time and resources to come to fruition, and more time to recoup those investments. When the government’s changing the value of money and bouncing your stock value like a yo-yo, you tend to hold off on long term planning.

You’ve missed the best part. To achieve the goal of Richie Rich having to pay the “Warren” tax, he will have to sell a lot of stock in publicly traded companies that also owned by pension funds, retirees, individual 401ks, et cetera.

Just think if Bezos and his wife have to repeatedly sell Amazon stock in the open market to meet the cash delivery on the tax. Or Gates or Balmer having to sell off their high flying Microsoft stock. Brin forced to Alphabet stock, Buffet and company selling off companies to get liquid of enough to generate a distribution of cash…et cetera, et cetera.

It will smack anyone else who has investments in related entities big time, and undoubtly reduce hiring at related companies.

Brilliant idea that only a liar turned lawyer turned deep state politician would think of….

And one wonders where the founders (and even early employees in some cases) of startups would get the money to pay their wealth tax on their on-paper wealth which is tied up in illiquid assets that may end up being worthless before they become liquid.

You can talk all you want morality but it won’t change the facts. The fact is that through a combination of stupidity on theirs and the government’s part and greed on the college’s part, we have an enormous number of young people who have student loan debt. This is creating some very negative second order effects. We have an entire that can’t get married, buy a house, or do a lot of the things that are necessary to accumulate wealth.

It is neither wise nor really paractical to just tell them to fuck off. The Republicans and the right can do that, but all doing it will accomplish is create an opening for the left to capture their votes. I don’t think it is practical to just ignore this and allow an entire generation to go socialist out of necessity.

The answer I think is to make these things dischargable in bankruptcy after say ten or fifteen years. Then put a tax on the college endowments to pay for whatever guarantees the government has to make good upon. The colleges are the ones who have benefited from this and they ought to be the ones who pay to clean up the mess.

That may be practical from the taxpayers’ viewpoint, but I’m at a loss to list even a handful of politicians–of any party–who give a flying fuck about the taxpayers’ viewpoint.

It may be a bit late anyway, given that we’ve already got Aunt Lizzie and Uncle Bernie telling the kids they can just plain forget about their debts with a cheery “we got this kids” (“we”…heh). Any alternative obliging the students to pay anything at all will have trouble competing with that.

It seems that way, but it’s really not. It would turn out like Obamacare, which was marketed as a way to help the middle class afford health insurance, but ended up being a massive wealth transfer from the middle class to the Democrats’ constituency of poors.

The “median” payment is not reflective of the full burden. Many loans start out with deferment programs that allow people to make very low payments for the first few years. That skews that figure low.

Moreover, kids are wisening up. The problem isn’t the class of 2018 so much as the ones from the turn of the century to about 2016.

Try understanding something about the subject before you waste people’s time saying stupid shit. It is really not conducive to a good conversation. If you are not smart enough to know what is going on, and it appears you are not, then just shut the fuck up so it doens’t have to be explained to you.

I am not aping anything except my utter contemp for idiots. If you don’t want my contempt, say something that isn’t stupid. You and Jeff are both just dumb as fucking posts and do nothing but make it impossible for people who are not stupid to have an intelligent conversation.

If these kids would *not* run off and buy a new car as soon as they got their first job maybe I’d have a bit more sympathy. My wife and I managed to pay off our student debt by not taking on more debt than we could afford. Why should I want to see other people get for free what we worked for?

The average student loan debt and payment are about what a car note and payment are. Pay it off, THEN go out and splurge on a new car or something. They’ve already had everything handed to them for their entire lives, played sports where no one kept score, been told they’re the greatest kid ever everyday. They just keep spending other peoples money like it was mommy’s and daddy’s and they never grow up.

Tell us, John, what other issues should be approached from a utilitarian, harm-reduction perspective? How about abortion and reproductive services in general? How about immigration? Your real motive here is equal parts pandering to students, and punishment of the universities.

John is so transparent here. He doesn’t give a shit about these students or their debt. He only want to pander to them to stop them from “voting socialist”, and to punish the universities which is his real goal here.

Stop projecting Jeff. Just because you are a tribalist idiot, doesn’t mean everyone else is. If you can explain why the colleges shouldn’t bear the responsibility for the people they educated and whose borrowed money they took should not bear the burden when the borrower can’t pay, explain it. But pretending that everyone is a tribalist moron like you doesn’t do that.

No one is blaming anything you idiot. The fact is a lot of these people can’t pay these debts back and never will. We have a system for dealing with such circumstances called “bankruptcy”. You may have heard about it. The only reason this is a problem is that these debts are not eligible for bankruptcy. That is understandable because otherwise people would just get the degree and then declare bankruptcy. That is why you don’t let them do that until a decade or more after they get the loans.

The other reason bankruptcy is a problem is that the government and the taxpayers guaranteed these loans and it isn’t fair that the taxpayers should have to bear the burden if they are made eligible for bankruptcy. What is fair is making the colleges who collected all of that loaned money bear the burdern.

Therer is nothing ultilitarian about that. Try understanding what words mean before using them.

If we denied them the loans, there’d be some lawsuits claiming racist and sexist conspiracies.

I’d like to see the student loan interest rates tied to the unemployment rate for the student’s major. Take Gender Studies? Fine, but that’ll run you 10.3% interest. Civil Engineering runs at 1.2% interest.

If we have so many Gender Studies graduates that they cannot be gainfully employed, we would we want to subsidize the creation of even more of them?

Actually, judging by John’s sputtering, inarticulate and incoherent name-calling and general inability to prove his point (it still isn’t clear to me what sort of crippling student debt is being faced by my generation. My monthly payments are about $100.), I would say that Jeff nailed it when he said:

You couldn’t give a shit about any of those people. It is about destroying the indoctrination centers. Yes it is just tribalism on your part because your raging inconsistency is so obvious.

It’s pretty transparent, frankly. If you don’t see it, then perhaps you need to stop emotionally siding with John because you think he’s of your tribe.

What happened to John the Defender of the Rule of Law? If the student signed a contract to borrow money under certain terms, why should the government step in to cancel that debt? Wouldn’t that create all sorts of moral hazard? You’ll have all sorts of institutions lining up to offer “free” money to customers, and then lobbying the government to cancel those loans. What happens when the next housing bubble appears and pops, and there are millions of homeowners underwater on their mortgages again, like in 2009-10? What will be your argument then on why those mortgages shouldn’t just be canceled by waving the magic wand of government?

Sure it does. And those exceptions can be changed. Congress can change the law. And as long as Congress does it rather than the courts, there is no implication of the rule of law. The rule of law doesn’t mean the law can never change. It just means the law as it is currently written must be followed.

You can disagree with making these loans eligible for bankruptcy. But it is not reasonable to say that doing so is an attack on the rule of law.

Seriously? Student loan debt was dischargeable in bankruptcy up until Congress made a law that it wasn’t anymore.

Gays couldn’t openly serve in the military until Congress made a law that said they could.

The fact that you’re chimping out at the idea of making student loan debt like any other debt out there is telling. Fuck, the Constitution actually authorizes Congress to make laws pertaining to bankruptcies. So why don’t you make the case that the status quo is just fine?

“Average student debt” and “median student debt” or payments are skewed quite a bit by the very high student loan debt of a small minority of students (medical school) where they have anticipated incomes that will allow them to service this debt.

Millions of kids who attend in-state public universities can graduate with very modest loans.

I’ve seen firsthand that in states with “free” college (lottery-funded scholarships) that students will still borrow out the yang to fund their luxury townhouse rental off campus and their millennial lifestyle. These developments have sprung up around colleges in the last 20 years. I’ve zero sympathy for student loan debt racked up in this fashion.

So according to John, this whole mess is the fault of student stupidity, college greed and government (he doesn’t say which but I’ll be charitable and call it ineptitude). But according to John, the people who should take it in the shorts are the taxpayers who didn’t have anything to do with creating the problem.

Yeah, that’s a way to win friends.

How about acknowledging that: 1. The “crushing debt” isn’t really as crushing as the demagogues are claiming. 2. These students are legally adults who are old enough to vote, old enough to die for their country and certainly old enough to accept the consequences of their financial decisions. 3. Going into debt because you are “following your passion” for underwater basketweaving might not be a great idea. 4. The massive tuition increases are the result of the increase in government spending on higher education.

[…] the people who should take it in the shorts are the taxpayers who didn’t have anything to do with creating the problem.

Not really. The “student debt problem” is mostly a middle class/upper class problem. Increasingly (for decades now) those households have a college graduate as a primary earner. These folks then sent their kids to college without grokking how the situation has changed from when they went to college, supported politicians who made sending kids to college easier, and endorsed the whole mess.

So no. The people who will be paying the bulk of any new taxes to fix this will largely be people who helped contribute to the problem and who benefited from the problem.

But according to John, the people who should take it in the shorts are the taxpayers who didn’t have anything to do with creating the problem.

That is not what I said at all. I said

The answer I think is to make these things dischargable in bankruptcy after say ten or fifteen years. Then put a tax on the college endowments to pay for whatever guarantees the government has to make good upon. The colleges are the ones who have benefited from this and they ought to be the ones who pay to clean up the mess.

Did you miss that paragraph or are you too stupid to understand what it means? What the hell is wrong with you? I never said a word about the taxpayers being on the hook. I say about 20 times on this thread how they shouldn’t be on the hook. Are you stupid or just dishonest or what?

So you are a fucking moron. Those debts are guaranteed by the government. When they are discharged the creditors are going to come to the government and collect on their guarantees. When that happens, it is a simple matter of taxing college endowments to pay for it.

What about that do you not understand? You seem to not know anything abotu bankruptcy other than the word. I ask again, what the hell is wrong with you?

Your answer is the “simple matter of taxing college endowments to pay for it”. That “answer” won’t last ten minutes. First, that would be a wealth tax. There is no legal for taxation in the US on the basis of wealth. Unless you’re planning to ram through a constitutional amendment, your plan is unimplementable. Second, even if you could implement it, the experience of every country that has tried a wealth tax is that the subjects find ways to move that wealth out of your jurisdiction. Wealth taxes never bring in even 10% of what their proponents claim. When the collection from taxing college endowments inevitably fails, the debts will fall to the taxpayers.

These students are legally adults who are…old enough to accept the consequences of their financial decisions.”

But only legally. In reality, considering 18-year-olds to be adults is a stupid and politically motivated mistake. Most prospective students make the decision to take on student loan debt when they are juniors and seniors in high school. At that age, they are most certainly NOT mature or experienced enough to make an intelligent decision about taking on a large, long-term debt.

Warren recognizes the problem, but offers the most retarded solution, with no understanding of how similar systems in other Western countries actually operate.

Yeah, we could provide “free” college, if EVERYONE was heavily taxed for it AND colleges went back to being elite finishing schools for a select few rather than glorified job-placement and indoctrination programs. But if colleges are going to be populist, then as you say, student loan debt needs to be treated like any other debt, and colleges need to have skin in the game on this, too, not just act as vacuums for federal loanbux and Pell Grants.

Or…the Republicans could be really sneaky and sponsor laws subsidizing employers to employ specifically people who don’t have college degrees! Wouldn’t that be a mindfuck as well as turning the whole interest-group tussle topsy-turvy? Bwhahahah!

Could Ms. DeVos get a regulation that no federal tax money could go to a college in any form, grants, loans, research, whatever, where the administrative staff exceeded 12% of the tenured teaching staff? Might reduce costs enough to cut tuition by a bunch.

Could Ms. DeVos get a regulation that no federal tax money could go to a college in any form, grants, loans, research, whatever, where the administrative staff exceeded 12% of the tenured teaching staff?

Warren’s campaign is circling the drain. She’s coming in sixth in the national polls, she’s coming in fifth in fundraising, and now I’m reading that she isn’t even winning among primary voters in Massachusetts, her home state!

“U.S. Sen. Elizabeth Warren ranks just third among presidential hopefuls in a new poll of Massachusetts Democratic primary voters.

An Emerson College poll released Sunday has Vermont U.S. Sen. Bernie Sanders leading with 26 percent, followed by former Vice President Joe Biden at 23 percent. Warren is next at 14 percent.

No, this early in the game, polls won’t tell you who is likely to win the nomination, but they can tell who’s going to lose–and Elizabeth Warren isn’t even likely to win the state in which she’s a Senator!

It certainly isn’t about name recognition. Nobody knows who Buttkrieg is, and nobody in Massachusetts may know much about Harris, but they sure as hell know who Elizabeth Warren is–and they do not want her, not even in her own state.

We should stop paying attention to her. She’s been nailed to her perch. She’s an ex-parrot. She has no chance of making it past Super Tuesday, much less winning, and she probably can’t generate the donations necessary to make it to Super Tuesday. She’s out of the contest. The last gasps she has left are making outrageous proposals in the media and jolting them to cover her for free–like Trump did in 2016. How pathetic. She’s a loser. She’ll be lucky to get appointed to something IF IF IF and when a Democrat wins the White House.

In some ways, Warren Derangement Syndrome is a mirror reflection of Trump Derangement Syndrome.

If Trump Derangement Syndrome led people in the media to believe that Trump had no relevance with the voters and no chance to win, Warren Derangement Syndrome makes people in the media believe that Elizabeth Warren has some relevance to voters and a chance to win–despite all evidence to the contrary.

Elizabeth Warren’s only relevance is as a senator from Massachusetts, and she may not win her next primary there.

But it will get interesting as Warren is going to spew any verbiage she thinks necessary in order to stay at least somewhat relevant. At this point in the process attention goes to the most progressive of the progressives [beyond a week of fascination with your cover on Vogue]; I expect Warren will become increasingly radical to the point of wanting to nationalize the Fortune 500 and sending deplorables to camp if only to score headlines.

Which is why the colleges should be paying to clean up this mess. Call Warren’s bluff. Make these things eligible for bankruptcy but make college endowments taxable to pay for it. The colleges got the money, why shouldn’t they have to pay for the defaults?

Why shouldn’t the people who benefited from these loans bear the responsibility of making good when the borrowers can’t pay them? Why should someone who paid back their loans or never went to college have to pay taxes to payoff other people’s loans? That makes no sense. The people who should pay for this, if it isn’t the borrowers should be the ones who most benefited from the system and that would be the colleges.

Just becaue you are a tribalist idiot with a very low IQ doesn’t mean everyone is. Some people are calable of reasoning beyond their prejudices. Stop projecting your ignorance on other people.

I absolutely can carry on a conversation without calling people stupid. I can, however, only do that when the person I am talking to isn’t stupid. So, I can’t carry on a conversation with you and Jeff without calling people stupid.

The only conversations you can carry on without calling people stupid is one way conversations which non-proggies recognize as “lectures”. Anyone who disagrees with or calls you out on lecturing is too stupid to understand.

Umm, student loan borrowers already pay interest. That’s not the punishment that you seem to be describing. In your analogy, it would be if the government charging banks a special tax based on borrowers who couldn’t pay their mortgages or car loans. Which is essentially the idea behind Obama’s CPFB. And you were such a fan of that idea, weren’t you John?

Every debter pays interest. That doesn’t mean that the creditor isn’t screwed if the guy can’t pay it back.

And yes, you could just walk away from the government guarantees and stick the banks with the bill for this. That, however, would be unjust because the banks only lent the money on the assurance that the government would back it up.

There is no perfect solution here. The best of the bad sets of options is to have the colleges bear the bulk of the costs. They are the ones who raised tuition as a result of this and they are the ones who most benefited from these loans. They should have to pay for it if their students can’t pay it back.

The government signed on the dotted line for these loans, the government can’t then go to colleges and retroactively assign blame. Borrowers will have to live with their choices and taxpayers will have to cover the defaults. Legislative intervention into existing arrangements would only make things even worse.

We need to focus on how to fix this in the future, foremost by getting the government out of this business altogether.

There is nothing that says colleges must be forever immune for taxes. Colleges can be taxed just like any other insititution.

We should revoke their tax exempt status. But that’s unrelated to the student loan issue.

No, we need to focus on fixing the mess now.

I have no idea what you mean by “fixing the mess now”.

The US government is on the hook for a lot of bad debt; that’s not going to change no matter by what means you raise new taxes.

Taxing educational institutions is a good thing for many reasons, but it won’t change the student loan issue, either retroactively or looking forward.

The only retroactive “fix” you could apply is to forgive student loans; I strongly oppose that. I think anybody who took out a $200k loan to study lesbian dance theory should be forced to live with the consequences of their bad choice.

And the only forward looking fix is for government to simply stop guaranteeing student loans.

You engage in the same classic error many progressives make: you place the blame with private institutions asking for money, instead of with the politicians giving it to them. It is perfectly fine for colleges to demand whatever they want, just like it is perfectly fine for you or me to demand lower taxes, demand electric car subsidies, demand whatever we want. There is nothing morally or politically wrong with asking politicians for special favors.

The responsibility when such government handouts happen lies exclusively with the politicians who actually control the budgets. Exclusively.

Apart from your fundamental error in moral reasoning, from a practical point of view, how does taxing colleges more address the issue of bad student loans? The taxes will simply be passed on to students and, if nothing else changes, covered by even bigger student loans.

You engage in the same classic error many progressives make: you place the blame with private institutions asking for money, instead of with the politicians giving it to them.

You do realize that there are a lot of public universities out there, yes?

Regardless, it’s telling that no one arguing against John here has made any sort of case for why student loan debt shouldn’t be dischargeable in bankruptcy. They whine that John’s solution “punishes” colleges unfairly (as if universities aren’t on the same entitlement grift train as any other welfare queen), yet can’t seem to fathom the end-state effects of millions of people having debts that are saddled with them for life.

I’m not in favor of “free” education at all, at any level. What I oppose is licensing and credentialism. I should be able to hire anyone I want to (doctor, lawyer, barber) w/o Government Almighty busy-bodies getting between me and my service provider, and requiring them to have all these degrees and licenses.

Making the right people pay for this? That’s what we’re debating here, right? If we HAVE to have “free” college educations, how about, instead of Warren’s “Ultra-Millionaire Tax”, we tax each degreed-and-licensed profession (doctors-lawyers-barbers etc) according to how many hours of education they require? You and your profession enjoy shutting others out of your trade via this meddlesome bullshit? Then YOU pay extra taxes to pay back for your sins! More taxes allocated towards all professions relying on this sin of being a fuck-buddy to Government Almighty!

No one is saying we should have free college. But understand, that if someone cannot pay off the debt from college, it is effectively free. You can’t get money where none exists. So, the question is who bears the costs when that happens. People default on loans all of the time. All of the “what about free..” apply to any loan that is discharged in bankruptcy. Why should student loans be treated differently than any other loan?

Moreover, if your concern is college being “free”. I would suggest to you that making the colleges bear the burden of their students not paying their loans back would do more to bring sanity back to the price of college than any other measure.

Lastly, take your complaints up about credentialism with the Supreme Court and the disparate impact test. Employers only started demanding credentials for every job after the Supreme Court made it illegal to give employees IQ tests.

Also I have read that studies (for years now) have shown that teacher effectiveness (at grade school and high school levels) doesn’t correlate AT ALL, to how many fancy degrees the teacher has… It correlates to HOW MUCH does the teacher READ! Read-read-read, it makes your smarter and more well informed!!!

The lender. In the case of student loans, that’s the tax payer these days.

I would suggest to you that making the colleges bear the burden of their students not paying their loans back would do more to bring sanity back to the price of college than any other measure.

That’s a great idea looking forward. But for a lender to retroactively hold a third party responsible for non-payment is unacceptable. It was US government policy to pay for degrees, and the US government encouraged and even subsidized many of these degree programs. You can’t blame the institutions who satisfied this government-created market demand for the outcome. These degrees are the educational equivalent of a “bridge to nowhere” and you’re trying to blame the contractors for building it rather than the politicians who screwed over taxpayers to pay for it.

There it is again, the name calling and insults. You used to be funny and actually said things without resorting to “shut up, you are stupid”. Did the glibs hurt you? Did bailing out form Reason, twice, upset you?

The colleges should be considered co-signers on these loans (as I was for my kids), so they pay the guv when the students default. Watch how fast the loans dry up! It will be a great test of the colleges’ faith in their own product.

No it doesn’t. But, what can’t go on forever, doesn’t. This is all going to come to an end sooner rather than later. When it does, the days of there being $30 billion hedge funds that run $100,000 a year colleges on the side will be over.

It is a quite a system. The feds give aid and loans to students to pay for college. The colleges then raise their tuition to eat up those loans and aid causing the public to demand more aid and loans for colleges. Colleges were thanks to federal aid able to raise their tuition at two and three times the rate of inflation for decades and just pocket that extra money in the form of salaries for administrators and enormous endowments. Yet, somehow they are totally blameless in all of this.

Maybe because the loans are underwritten by the government? Maybe because there’s pretty much zero collateral for the loans? Maybe because there’s pretty much zero in the manner of creditworthiness checks allowed for student loans?

All of which sets them up as ripe for long-term abuse, and if you make bankruptcy the “solution” then there’s not much stopping them from becoming a cash pipe to scams and people who just ride the wave for as long as they can then bail out and stick taxpayers with the bill?

I becoming curious as to what part of their lives the new generation thinks they should be responsible for? I’m starting to think they want the reward without the risk or responsibility. There is one group of people I do expect that from, children.

If I develop a gambling problem and run up a $100,000 in credit card debt that I can’t pay, I can walk away from it all in bankruptcy. Why should my developing an education habit and running up $100,000 in student loan debt be any different?

The other thing is that there is two reasons why we have bankruptcy. The first is to give people a fresh start. The second reason that people forget is to provide an orderly and fair way of distributing the assets of a debter to the creditors. Why should student loans get priority over all other forms of debt in such a situation?

Credit cards have high interest rates to help the lender recoup losses from such instances. Everybody pays more to cover the dipshits out there. Do you want interest rates on student loans to go to 15, 20, 25% like credit cards so lenders can be indemnified from bankruptcy losses? How is that going to help people? It most certainly help lower student debt.

Do you want interest rates on student loans to go to 15, 20, 25% like credit cards so lenders can be indemnified from bankruptcy losses?

If that would reflect the actual risk associated with these loans, we should. Second, these loans will be made good. They just will be made good by the colleges who benefited from them under my proposal. So, no the interests rates won’t go up.

Just curious, who will enforce compliance with the universities? They entered into no contract for the debt. My prediction would be they would stiff the banks and win in court because there wouldn’t be any legal culpability on the college’s part as a third party. So then interest rates will go up and debt will go up.

Just curious, who will enforce compliance with the universities? They entered into no contract for the debt.

The Department of Education. Managing the federal student loan and grants program is literally one of their responsibilities. And if universities are hell-bent on sinking their funding into bullshit make-work admin jobs rather than their instructors, which has been a trend going on for about 30-40 years now, then they can reap the responsibility for their lack of fiscal priorities.

You really think universities are going to welsh on the government if they think the spigot of student loans from Uncle Sam will get turned off? And don’t you think it would be better for higher education overall if such a policy actually motivated the university system to wean itself off of federal loanbux and grants so they wouldn’t be liable for such penalties, while putting some of that loan business back into the private sector, which can offer competitive rates?

Right now there is no private sector lending for student loans thanks to Obama nationalizing that sector of the banking industry. So they are going to use government money (Uncle Sam’s student loan spigot) to pay the goverment’s bad debts they issued to deadbeat students. And somehow there won’t be more “make-work” admin jobs to take their cut along the way. Seems like you are going to make the problem worse. The best solution would be to entirely remove the federal government from education at all levels by eliminating the DOE.

Right now there is no private sector lending for student loans thanks to Obama nationalizing that sector of the banking industry. So they are going to use government money (Uncle Sam’s student loan spigot) to pay the goverment’s bad debts they issued to deadbeat students. And somehow there won’t be more “make-work” admin jobs to take their cut along the way. Seems like you are going to make the problem worse.

If legislation changes to allow bankruptcy in student loans, why couldn’t this item be addressed and changed as well?

The best solution would be to entirely remove the federal government from education at all levels by eliminating the DOE.

The DoEd has been in place for 40 years, and its functions were under what is now Health and Human Services for decades before that. It’s not going anywhere short of a total social and bureaucratic collapse.

We need more legislation to fix the existing bad legislation, that will have additional legislation to fix loophole and clarify what we want, and perhaps a new department or two to enforce the new legislation that can all be fixed by repealing the first bad legislation. Reminds me of a little old lady who swallowed a fly.

If I take a home loan I can’t pay, the house can be taken back/liquidated to help cover some of the debt.

Same with a car.

You can’t do that with knowledge.

People can have their assets liquidated to cover some or all of their debts other than car or home loans. It happens all the time, but the outcome is determined by bankruptcy court. Student loan debt would simply work the same way–the bank/feds/colleges might have to eat some or part of the unpaid debt. The debtor has their credit fucked for a few years, but they get out from under the debt. If the outcome is that student loan program and college admissions are run a bit more judiciously than “Everyone should go to college, here, have some student loan money! Don’t worry about tuition costs or books, the loans are low interest and subsidized!,” then in the long-term it’s a win.

We have personal bankruptcy laws to create an economy based on easy credit and debt, that’s all.

Why should student loans get priority over all other forms of debt in such a situation?

Because the priority of debtors is decided by contract, and that’s what the contract says for student loans. The people taking out the loans know that, and so do other lenders.

If I develop a gambling problem and run up a $100,000 in credit card debt that I can’t pay, I can walk away from it all in bankruptcy. Why should my developing an education habit and running up $100,000 in student loan debt be any different?

You shouldn’t. Credit and personal bankruptcy should be much harder and more painful than it is in the US today. Personal bankruptcy laws are a form of regulatory capture, and they are harmful to the long term interests of citizens.

Because the priority of debtors is decided by contract, and that’s what the contract says for student loans. The people taking out the loans know that, and so do other lenders.

So? Student loans could be discharged in bankruptcy at one time in the not-too-distant past. That was hardly a period where the financial industry was threatened by mass discharge of student loan debts.

Personal bankruptcy laws are a form of regulatory capture, and they are harmful to the long term interests of citizens.

Bullshit. The whole point of bankruptcy law is to prevent things like debtor’s prisons from being established. The bank assumes the risk that the lender won’t be able to pay back the loan, and the borrower assumes the risk that their credit will be fucked to high heaven if they don’t fulfill their responsibility to repay it. The claim that personal bankruptcy law is “harmful” is pure sophistry.

Nothing. They are owed their existence as mommy’s special little boys and girls or transwhatevers. Soemone else is supposed to pay their rent, cell phone, car note, insurance for their entire lives so that their “earnings” from their “jobs” can continue to go into lattes and vacations.

Don’t bother waiting for conservatives to come around on climate change

The left has an army of people in universities, think tanks, and consultancies, examining public opinion using all the latest tools, producing the most sophisticated reports. The basic model of savvy “realism” on the center left is to study the shape of public opinion, with all its subcategories, and react to it.

Meanwhile, the right has an army of people on cable news, the radio, and Facebook dedicated to shaping public opinion, stoking it, dragging it rightward. Not investigating it, not charting it, not reacting to it — creating it.

The left’s technocrats are targeting values-based messages at New Era Enterprisers while the right is out building full-fledged identities, letting conservatives know what they’re supposed to think.

The underlying tone of hysteria in that passage is telling. It’s a tacit admission that the Boomer New Left ideology is now the status quo, and anything which opposes it is a rebellion against that established political and social order.

Expect the left, especially the Tumblrina brigades that inhabit the halls of academia and the Mass Media Industrial Complex, to become increasingly totalitarian in the coming years as they seek to maintain and increase their grip on power.

Yes it should. But it stopped taking care of it when the government created public schools and caused people to think it was no longer their responsibility to educate themselves and their children. That more than all of the wasted money is the biggest harm of public schools.

Or how about we ask why we need primary education when people can teach themselves whatever they need using the Internet. Shouldn’t that take care of it?

Have you seen the internet? Even some of the exceedingly libertine and hedonistic libertarians around this part are pretty convinced that kids, until their late teens, shouldn’t be allowed anywhere near the stuff.

So now college should be free in the same way K–12 education is. I got one of those free K-12 educations. Now, every year, even 55 years later, a good chunk of my income goes to pay taxes supporting that “free” education. I’ll be paying off high school as long as I live, and after that the local school district will tax my grave site. (No, I’m not paying for my kids. They pay the same taxes for their “free” K-12 educations.) Students with even horrendous college debt can theoretically, eventually pay it off, but I will never, ever finish paying for “free” high school.

When they say “We’ll give you free college so you can earn lots of money, and we’ll pay for it by taxing people with lots of money,” you’d think at least some of the students would catch on to the con.

Critical thinking and connecting the dots is apparently not their strong suit.

The left likes to say everyone is ‘misled’ and the ‘game is rigged’ and then turn around and sell cheap alchemy to ‘solve’ this faulty premise.

If people can’t understand the notion of determining if debt is in their best interest and servicing that debt aftweward, then that’s on them. After all, are we not sovereign individuals with agency?

If you’re foolish enough to say, ‘hey, 50k to get that gender studies degree’ and then sober up and realize, ‘Yeesh, how am I gonna pay for this?’ the worst thing government can do is to step in and ‘save’ them.

It’s enabling and sending the absolute wrong signals to society. The quicker people grasp no one is entitled to post-secondary education and that it’s not society that should pay for your choices, the quicker things can jolt back into place.

For student loans, I’ve had the idea that the interest rate paid for loans funding particular majors should reflect the unemployment rate associated with the respective major.

Chemical Engineering majors could pay 4% (most chem eng grads have jobs). Nuclear Engineering majors get a deal at 0.0%. OTOH, Social Work majors would have to pay 11.9% and “Cultures” majors would have to pay 21.4%. Education majors split difference at 8.5%.

Why are we subsidizing the creation of more Social Workers and Gender Studies grads when it is clear we have a glut of them already?

But there’s also a moral argument to be made here: Why shouldn’t we expect people who can pay for their own education, health care, and retirement to do so?

Why shouldn’t we expect everybody to pay for their own education, health care, and retirement? Why do you want to create a moral hazard where you encourage people to go into poverty in order to obtain free stuff? How can any libertarian justify forcibly taking private property to pay for benefits and services for others?

Gillespie has already fully subscribed to the statist vision, he’s now just haggling over the details.

Or he’s being pragmatic and trying to work within the realm of things that are politically possible. Or he’s trying to make arguments that will appeal to people who aren’t already hard-core libertarians. And libertarians for the most part are statists haggling over where exactly the limits of the state should be.

“student load debt should be treated like any other debt when it comes to bankruptcy.”

You’d need to treat it like other forms of credit first. Collateral, credit checks, ability to repay, creditworthiness, interest rates that are commensurate with the risk of non-repayment…and stop government underwriting of the loans without something like PMI being attached.

Why are we judging what grown adults should pay for college based on what their parents can afford? In what other contexts do we do this? Maybe their parents can afford to pay but simply aren’t willing to.

I’ve been saying they should abolish interest on federal loans for education since the ‘90’s. Every time I bring that up with anyone who’s liberal, I get a look like they’re about to either cry or go rip their shirt off and fight me….and they go back to thinking about how they can come up with an idea to make it free.

In bankruptcy proceedings, creditors get something of value from the remains of the company. So, I’ll agree to forgiving student loans if we get to lobotomize those who get student loan forgiveness.

I paid my $61.58/month for 10 years. At that time, some months it was a challenge. However, I am one of six – maybe eight – political science majors actually using my degree for something other than being a professor (which I was for almost 40 years).

The whole concept of “Free Stuff” appeals to only the most base among us. Do we, as a nation, want to promote a generation of takers? “Eventually you run out of other peoples money” -Margret Thacher. What then? Once you’ve raised an entire generation that knows nothing of personal responsibility, you can’t expect them to live any-other way without much pain and suffering. Better to learn today, while they’re young, the value of hard work and personal sacrifice in order to earn their keep. Then, there is the fact some children are simply not college material. Why force those not suited to higher leaning, to take the seats of more qualified candidates.

My roomate’s half of-sister makes $77/hr on the internet. She has been without artwork for 7 months however very last month her pay have grow to be $14333 in truth walking at the internet for some hours. test This Out…http://Jobsreport5.com

Why should an “adult”, i.e., an 18 year-old, have to rely on their parent’s income to determine their eligibility for college grants if others are getting it for free? What if well-off parents don’t agree to pay their way? I actually know of a case like this – this person was forced to join ROTC to finance college. If he did, why shouldn’t others? The point is, government choosing who gets “free” college creates all sorts of imbalances and unfairness in the system. I would eliminate all college grants. There are ways to get through college if you really want the degree.

[…] Say what you will about supposedly stagnant wages and the like, but we live in a country where a record-high percentage (67 percent) of low-income high-school grads go on to college, more than double the share in 1980. […]

[…] Say what you will about supposedly stagnant wages and the like, but we live in a country where a record-high percentage (67 percent) of low-income high-school grads go on to college, more than double the share in 1980. […]

[…] Say what you will about supposedly stagnant wages and the like, but we live in a country where a record-high percentage (67 percent) of low-income high-school grads go on to college, more than double the share in 1980. […]

[…] Say what you will about supposedly stagnant wages and the like, but we live in a country where a record-high percentage (67 percent) of low-income high-school grads go on to college, more than double the share in 1980. […]

[…] Say what you will about supposedly stagnant wages and the like, but we live in a country where a record-high percentage (67 percent) of low-income high-school grads go on to college, more than double the share in 1980. […]

Democrats are very dangerous to this country, more dangerous than our foreign adversaries.

Of course they would love to pump even more money into their lavish brainwashing camps known as universities. Already, the trillions in student loans are government money.

The answer to higher education is obviously that the federal government should end all government student loans. This will mean that many of our institutions of higher education will go bankrupt or face the need to downsize, restructure, and cut costs.

And that would be a wonderful, glorious thing. With a free market for higher education, prices would return to the times of Boomers and earlier, when college tuition could be paid with a summer’s wages (now that will barely cover your “books”). You would see a lot more online-only material. You would see facilities downgraded from lavish and palatial to merely adequate. You would see a lot more focus on actually learning material and testing knowledge and ability in a test that could be taken on a computer at very little cost. You would not see as many resources available for armies of “diversity coordinators” and other admins, various leftist brainwashing curricula and activities, and other frivolities.